Expert Guide | Do Sellers Pay the Buyer’s Agent Commission? 2025 🏡

When it comes to selling a home, one question always seems to pop up: do sellers pay the buyer’s agent commission? If you’ve ever wondered how real estate commissions work or who’s responsible for covering these costs, you’re not alone. The way commissions are structured can feel confusing, especially for first-time sellers.

We know it’s important to understand exactly where your money goes during a home sale. By breaking down how commissions are negotiated and what’s typically expected in the market, we’ll help you make informed decisions and avoid surprises at closing. Let’s clear up the confusion so you can move forward with confidence.

Understanding Realtor Commissions

We recognize that real estate commissions create uncertainty for many home sellers. Transparent fees matter—not just for budgeting, but for weighing our best path forward during a sale.

Traditional Commission Structure

Traditional commission structures usually involve a total commission of 5% to 6% of the home’s final sale price, split between the listing agent and the buyer’s agent. In most markets, the seller’s proceeds fund both agents’ compensation, even though the buyer’s agent works for the buyer. For example, on a $400,000 home, a 6% commission equals $24,000, with $12,000 going to each agent’s brokerage, before company splits or additional fees. Industry expectations often guide these numbers, but some brokerages and regions see negotiable rates. Sellers benefit by understanding how commission terms appear in listing agreements and settlement statements, which clarify their legal obligations when offers are accepted. State laws rarely cap commissions—so conversations with potential agents about breakdowns, strategies, and savings are strategic, not just procedural. Precise knowledge of these mechanics helps us identify where we have negotiating leverage and where standard practice applies.

Recent Changes in Commission Practices

Recent years brought increased scrutiny to how commissions are disclosed, negotiated, and distributed. Ongoing lawsuits, like the National Association of Realtors (NAR) settlement in 2024, have led some brokerages to make commission offers more transparent—especially regarding the buyer’s agent’s portion. Certain listing platforms now let sellers decide whether to offer a buyer’s agent commission at all, which has started to create variability at the local level. In some states, regulations now require explicit disclosure of agent compensation and clear communication about who pays which portion at closing. High-cost and low-inventory markets, including cities like Seattle and Austin, have seen sellers experiment with reduced or even zero buyer’s agent offers—though this approach can reduce buyer pool size or lead to slower offers. As practice changes unfold, sellers face a more flexible but potentially more complicated negotiation landscape, where custom agreement terms replace earlier assumptions. We ask: in a shifting market, which risks or advantages weigh more for those looking to maximize returns or streamline closing?

Do Sellers Pay the Buyer’s Agent Commission?

Sellers in most U.S. home sales pay both their listing agent’s and the buyer’s agent’s commission out of the transaction proceeds. This practice shapes the expectations and financial planning for sellers, especially in markets where negotiation and timing matter.

Typical Scenarios in Residential Transactions

Standard residential purchase contracts structure agent commissions as a single fee—commonly 5% to 6% of the property’s selling price—paid by the seller at closing. Local brokerages then split this amount, typically offering half to the buyer’s agent who brought the offer. This arrangement streamlines payment, prevents double-charging buyers, and ensures both agents are motivated to facilitate a successful transfer of property rights and title. If a seller agrees to a lower or zero buyer’s agent commission, that decision often appears in the listing as a signal to buyer agents—sometimes narrowing the pool of prospective purchasers, especially those relying on representation. Sellers weighing this route must consider how agent incentives interact with their timeline, desired price, and property disclosure requirements. Are we prioritizing exposure and speed, or maximizing proceeds at the risk of a slower process?

Regional Variations and Exceptions

Real estate markets adjust their commission customs based on state rules, buyer demand, and local price points. Some regions—like the Northeast and West Coast—see higher average commission rates, while areas with increased competition among agents, such as Texas and Florida, trend slightly lower. Exceptions arise in fast-moving urban markets, where sellers experimenting with lower or no buyer’s agent commission can see reduced agent interest or a need for creative incentives. Disclosure laws in states like Colorado make commission splits transparent in settlement documents, while in others, disclosures may only appear in agency agreements. High-cost, low-inventory states sometimes display offers of compensation through MLS data or brokerage websites, letting sellers highlight negotiable terms to attract targeted buyers. Reflecting on these regional nuances, we weigh whether the prevailing approach in our area supports our goals—or if adapting our commission offer could mean the difference between a quick sale and lingering uncertainty.

Impact on Home Buyers and Sellers

Understanding how buyer’s agent commissions factor into a sale enables both sides to make informed, confident decisions. These commission structures shape both the financial bottom line and negotiating power through every step of the transaction.

Financial Implications for Sellers

Commission obligations directly reduce the seller’s net proceeds from a home sale. When we pay a buyer’s agent commission—often totaling 2.5% to 3% of the purchase price—our bottom line adjusts accordingly, especially in high-value markets like California or New York where average commissions trend higher. Changes in industry practice increasingly give us the choice to offer less or skip this commission, but real consequences follow. Lowering or omitting the buyer’s agent fee could shrink the pool of agents willing to bring buyers, particularly in slower-moving markets or when listing homes with unique issues, such as flood zone properties or those needing significant repairs. Title transfer timelines and closing costs also depend on regional custom—some states split costs or standardize what sellers pay, while others leave commission terms solely up to negotiation. Asking ourselves if a slight savings upfront outweighs slower sales or lower offers grounds the decision in practical outcome rather than mere dollar amounts.

How Buyers Are Affected

Buyers feel the impact of commission policies in both visible and hidden ways. Traditionally, sellers covering the buyer’s agent commission meant most buyers—a group including first-timers and those relying on mortgage financing—didn’t need extra cash at closing. As the industry shifts and more sellers refuse or negotiate lower commissions, buyers might directly shoulder these costs. This could disadvantage cash-strapped or lower-income buyers, especially in states where no legal protections or norms protect them from sudden added fees. Reduced buyer’s agent fees sometimes lead agents to discourage clients from certain listings—meaning homes can sit unsold even in otherwise active markets. For buyers, the true cost of “affordability” goes beyond advertised list prices, extending into the negotiation power, representation quality, and final closing disclosure. Each of us must watch for shifting norms in our markets and weigh what support and advocacy are worth when navigating a complex transaction.

Negotiating Commission Arrangements

Commission negotiations shape nearly every home sale, especially as recent legal shifts prompt sellers and buyers to revisit their roles in agent compensation. Understanding the mechanics and options can help both sides manage risk without leaving money or opportunity on the table.

Options for Sellers

Sellers today encounter more flexibility—and responsibility—when structuring agent commissions. We can offer a traditional split, covering both listing and buyer’s agent fees, or negotiate alternative arrangements, like flat fees or reduced percentages. For instance, some owners in California and New York choose commissions between 4% and 5% to remain competitive, while others in Texas opt for lower rates in high-turnover markets. In some cases, we’re seeing sellers list homes without offering a buyer’s agent commission at all, but this approach can shrink the buyer pool and delay offers, particularly in slower markets. Before accepting any terms, we need to review local custom, recent comparable sales, and the fine print in listing agreements. Ultimately, our approach affects not only our net proceeds but also how widely—and quickly—our property appeals to qualified buyers.

Tips for Buyers

Buyers now face a landscape where agent commissions could become their own expense, rather than bundled within the seller’s closing costs. We recommend discussing at the outset how our agent gets paid, and what happens if the seller’s offer covers less—or nothing. In states like Florida and Illinois, where custom varies by market, buyers sometimes negotiate with their agent to structure an hourly or flat fee for representation, ensuring transparency from day one. When a listing omits a buyer’s agent payment, we need to factor these costs into our down payment and loan pre-approval, since lenders rarely allow commission fees to be financed. Scrutinizing every line of our agent agreement helps us avoid hidden charges and aligns our expectations before we fall in love with a home. Each commission arrangement influences not only our upfront expenses, but also the depth and quality of the guidance we receive along the way.

What the Future Holds for Commissions

Industry standards for real estate commissions continue to evolve, shaped by regulatory shifts and changing consumer expectations. As sellers and buyers adjust to new norms, understanding possible changes in legal precedent and payment structures helps everyone plan for a more transparent transaction.

Legal Developments and Ongoing Lawsuits

Legislative and court actions are reshaping how commissions work across the U.S. In recent years, lawsuits such as Sitzer/Burnett (Missouri class action) and the National Association of Realtors (NAR) 2024 settlement spotlighted agent compensation. These cases challenged practices where sellers almost always paid both agents by default, sparking government scrutiny and prompting brokerages to update their policies.

We now see states introducing disclosure requirements and brokerages modifying buyer representation agreements to make compensation terms more explicit. For example, as of May 2024, the NAR settlement requires agents to negotiate commissions upfront and to avoid blanket offers through the MLS. While rules differ by location, this movement emphasizes informed consent and transparency during listing and offer negotiations. As legal proceedings continue, we expect court actions to influence commission customs in states beyond those already seen in Missouri and Illinois. Sellers and buyers who follow legal developments closely protect themselves against surprises—and position themselves to negotiate proactively.

Potential Shifts in Payment Responsibility

Market changes point toward a future where buyers could assume more responsibility for their own agent’s fee. While most markets still feature sellers funding both sides’ commissions from sale proceeds, some brokerages have started offering buyers compensation agreements or flat-fee models. Many high-volume platforms now leave the decision to offer a buyer’s agent commission entirely up to the seller—especially in tight-inventory cities where some sellers offer no commission at all.

Conclusion

As the real estate landscape shifts we’re seeing more choices and responsibilities for both sellers and buyers. It’s never been more important to understand how commission agreements work and how they affect our bottom line.

By staying informed and working with experienced professionals we can navigate these changes with confidence. Let’s make sure we’re asking the right questions and weighing all our options so we can achieve the best possible outcome in our next transaction.

Frequently Asked Questions

Are sellers usually responsible for paying the buyer’s agent commission?

Yes, in traditional real estate transactions, sellers typically pay the commission for both their listing agent and the buyer’s agent. This total commission is usually about 5% to 6% of the final sale price, split between the two agents.

Can sellers negotiate the amount they pay in agent commissions?

Absolutely. Real estate commissions are negotiable. Sellers can discuss the percentage and structure with their agent before signing a listing agreement, especially since no state laws set commission minimums or caps.

How have recent legal changes impacted commission practices?

Recent settlements, like the National Association of Realtors (NAR) agreement in 2024, have led to more transparency and flexibility. Sellers now have greater choice over offering a buyer’s agent commission, and some brokerages are offering alternative fee structures.

What happens if a seller declines to pay the buyer’s agent commission?

If a seller chooses not to offer a buyer’s agent commission, it may reduce the number of agents willing to show the property to their clients. This can shrink the pool of potential buyers and impact how quickly the home sells.

Are there regional differences in real estate commission rates?

Yes, commission rates and customs can vary by location. For example, rates tend to be higher in the Northeast and West Coast, while Texas and Florida generally have lower average commissions due to more competition and different market dynamics.

How does the buyer’s agent commission affect the seller’s proceeds?

The commission amount comes directly out of the seller’s sale proceeds. A higher total commission means lower net proceeds for the seller after closing costs are paid, especially in high-value markets.

What do buyers need to know about commissions under new rules?

In some markets, if the seller does not pay a buyer’s agent commission, the buyer may have to cover this fee themselves. Buyers should discuss commission structures with their agent upfront and carefully review their contract.

Can sellers use flat fees or other alternative commission structures?

Yes, alternative commission models like flat fees or reduced percentages are becoming more available. Sellers should review local customs, compare recent sales, and negotiate terms that fit their goals and market conditions.

What are the risks of offering a low or zero buyer’s agent commission?

Offering little or no commission to buyer’s agents can limit interest from agents and their clients, especially in slower or more challenging markets. This may lead to fewer offers or a longer time on market.

How are real estate commissions expected to change in the future?

Commission practices are evolving due to legal developments, consumer demand, and ongoing industry reforms. There is a trend toward greater transparency and flexibility, and buyers might see more responsibility for their agent fees going forward.